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V0254-19 7 February 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Exemption for principal residence does not apply if the property was not the main residence in the two years prior to sale

A 68-year-old taxpayer inquired whether the sale of a property, which they ceased to inhabit in 1992 following a judicial separation, would be exempt as their principal residence. The Directorate General of Taxes (DGT) ruled that the exemption does not apply because the requirement of having been the principal residence at the time of transfer or during the two preceding years was not met.

The question raised

If said property were sold in 2019, whether the capital gain obtained would be exempt on the basis that said property is "their primary residence".

The DGT's ruling

For the capital gain to be exempt as a primary residence, the building must have been a residence for at least three years or have held such status until any day within the two years prior to the transfer. In this case, as residency ceased in 1992, this requirement is not met. Nevertheless, the taxpayer may opt for the exemption if the amount is allocated to the establishment of an insured life annuity in their favor.

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